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Financial Management > Test 1 > Flashcards

Test 1 Flashcards

0
Q

Neutrality

A

Reliability

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1
Q

Feedback value

A

Relevance

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2
Q

Industrial comparison

A

Comparability

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3
Q

Predictive value

A

Relevance

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4
Q

Verifiability

A

Reliability

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5
Q

Timeliness

A

Relevance

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6
Q

Same “thing” between different time periods

A

Consistency

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7
Q

4 types of financial statements

A
  1. Balance sheet
  2. Income statement
  3. Statement of cash flow
  4. Statement of owner’s equity or retained earnings
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8
Q

Why is cost the primary piece of information for accounting?

A

Objective
Verifiable
Reproducible

This concept is called “cost valuation”

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9
Q

The value of a business after accounting for liabilities is . . .
“The owner’s claim to the business resources”

A

Stockholders equity (owners equity)

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10
Q

If total assets (A) increase what must happen to SE or L?

A= L + SE

A

Increase

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11
Q

Assets that are expected to be exchanged for cash or consumed during the operating cycle

A

Current assets

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12
Q

Represents legally enforceable claims on customers for prior services of goods

A

Accounts receivable

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13
Q

The amount invested and reinvested in a company by its shareholders

A

Stockholders equity

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14
Q

The business’s profit =

A

Revenues - expenses

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15
Q

Sales of goods or services to customers. Measured at the amount the business charges the customer

A

Revenue

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16
Q

The costs of business necessary to earn revenues, including wages to employees, advertising, insurance and utilities.

A

Expenses

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17
Q

Statement that lists TA and TL of a company

A

Balance sheet

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18
Q

Portrays a company’s net worth at any moment in time

A

Balance sheet

19
Q

Savings account

A

Cash equivalent

20
Q

Records the company’s revenues and expenses for a specific period of time

A

Income statement

Revenues - expenses = net income

21
Q

Reports how a company’s retained earnings have changed over some time period

A

Statement of owner’s equity

22
Q

Reports all major cash receipts (inflows) and cash payments (outflows) during a period

A

Statement of cash flows

23
Q

May be used as an analytical tool to asses short-term VIABILITY of a company

A

Statement of cash flows

24
Q

What do TPPs impact?

A

Cost
Access
Reimbursement to pharmacy
Pharmacy’s ability to make a profit

25
Q 
What is in charge of:
Formulary development & management 
Cost management 
Claims processing 
Provider payment
A

PBMs

26
Q 
Which of the following do PBMs do? 
A. Purchase prescriptions from manufacturers 
B. Provide medications to pts
C. Submit claims to Health insurer
D. Pays premiums to health plan
A

C

27
Q

Which of the following do wholesalers do?
A. Purchase prescriptions from manufacturers
B. Provide medications to pts
C. Submit claims to Health insurer
D. Pays premiums to health plan

A

A

28
Q

Which of the following do pharmacies do?
A. Purchase prescriptions from manufacturers
B. Provide medications to pts
C. Submit claims to Health insurer
D. Pays premiums to health plan

A

B

29
Q

Which of the following do plan sponsors do?
A. Purchase prescriptions from manufacturers
B. Provide medications to pts
C. Submit claims to Health insurer
D. Pays premiums to health plan

A

D

30
Q

WAC

A

Wholesaler Acquisition Cost

31
Q

AMP

A

Average manufacturers price

*what Medicaid & Medicare use to pay pharmacies back

32
Q

AWP

A

Average wholesale price

33
Q

AAC

A

Actual acquisition cost

34
Q

EAC

A

Estimated acquisition cost

35
Q

What is a weighted moving average that takes into account the variance between actual and forecasted?

A

Exponential smoothing

36
Q

What is a time series model that fits a trend line to a series of historical data points and then projects the line into the future for forecasts

A

Trend projections

37
Q

A straight line mathematical model that describes the functional relationships between independent and dependent variables

A

Linear-regression analysis

38
Q 
\_\_\_\_\_\_\_\_\_\_\_ can be correlated to: 
Prices
Advertising budget
Competitors prices
Customer service 
Level of inventory 
Unemployment rate
A

Prescription sales

39
Q

What quantitative forecasting method assumes that the future period will equal the actual period?

A

Naive approach

(Most cost effective
Good starting point for other models)

40
Q

What are the four components of time series models?

A

Trend
Seasonality
Cycles
Random variations

41
Q

A schedule explaining any differences between the bank and the company’s record of cash

*one of the most important tools used in the control of cash

A

Bank reconciliation

42
Q

What is the pharmacy’s ability to pay back its debt over the long term?

A

Solvency

43
Q

What shows the pharmacy’s profitability?

A

Income statement

44
Q 
Which of the following are profitability ratios? 
Gross margin
Current ratio
Return on assets 
Cash flow 
Debt-to-total assets ratio
Efficiency ratio
A

Gross margin
Return on assets
Cash flow
Efficiency ratio

45
Q 
Which of the following are liquidity and solvency ratios? 
Gross margin
Current ratio
Return on assets 
Cash ratio
Debt-to-total assets ratio
Efficiency ratio
Quick ratio
A 
Quick ratio
Cash ratio
Current ratio 
Debt to total assets ratio 
Debt to equity ratio
46
Q

what tells you what the company can do with what it’s got?

It indicates the profitability of the company relative to its TA before leverage

A

ROA

Financial Management (2 decks)

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